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Gina NY

choosing a 403b plan

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46 minutes ago, tony said:

Gina

Since you are interested in low fees I would explore Direct Invest First with Security Benefit. If that becomes a struggle for any reason you still have Aspire. Try and tap into Vanguard Index Funds through their Target Funds and if you can transfer all your assets over to It from American. Looks like American has been eliminated however from your list. I would still try it. 

I would  do a Vanguard Target Retirement fund   which will be low cost, and self managed so you can set it and forget it since Vanguard will automatically adjust it for you as you get closer to retirement. Sign up for the one closest to your probable retirement date. If you do the target retirement you are set. All you will ever have to worry about is increasing your contributions . NO ADVISOR NEEDED AT ANYTIME.

IMHO the target fund is a good option for you but others may disagree.  I hope we are not confusing you with all this information. It can be overwhelming if you are not familiar with investing.  But what we tell you is honest and truthful.

Tony, the target date fund in NEA Direct Invest are not Vanguard funds and are expensive compared to the 8 Vanguard index funds:  

The 8 Admiral class Vanguard funds:
Vanguard Total Stock Market Index ER 0.05%
Vanguard Total International Stock Index ER 0.14%  
Vanguard Intermediate Term Bond Index ER 0.10%

Vanguard 500 Index ER 0.05%
Vanguard Growth Index ER 0.09%
Vanguard Mid Cap Index ER 0.09%
Vanguard Small Cap Index ER 0.09%
Vanguard REIT Index ER 0.12%

If Gina wants suggestions on using just the 3 bolded funds, she can certainly get help here on the forum. Rebalancing is not that difficult. 

There's nothing wrong with checking out Aspire and Lincoln Investment Planning and comparing them with SB NEA Direct Invest. Frequently only one of these vendors is on the district's provider list, and we've recommended each of them frequently. In Gina's case, I think NEA Direct Invest is a very good choice, less expensive than the other two. 

Gina there's another poster wondering about the Lincoln DIY plan currently on this forum.  http://board.403bwise.com/topic/6799-403b-vendors-recommandation/ This plan is available in NJ but only in selected districts in NY and IL, as far as we know. Getting permission to use it involves contacting a regional Lincoln office. A local rep might not know about the plan, or might try to sell you a much more expensive plan. I don't think a local rep has the authority to give you permission to use it. It's called their Participant Directed Platform, and has Vanguard Admiral class funds and charges $60/yr. It is both a 403b and 457 plan. 

 

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I am interested in low fees but with a good return rate. If I need to compromise on fees in order to get a better return rate I can do that as well. Whatever you think is the best way to go so that when I retire I have made a smart choice! 

 

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The Lincoln PDP offers Vanguard Target Retirement funds if it is available for your district. 

I was in Lincoln's PDP but transferred to Security Benefit's NEA DirectInvest.  I'm invested in the three funds that Krow listed in bold.  The transfer process was frustrating but now that I'm in DirectInvest I am very happy with the service.  The website is great, easy to use and I can update account holdings, re-balance etc.

The Lincoln PDP doesn't give you the same access to your account that DirectInvest does.  You can view statements but you can't update your investments or re-balance without speaking with a representative.  This wouldn't be a problem if you were in a Target Retirement Fund though.

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Krow,   I don't know the specifics of what Direct Invest Offers until you now pointed it out. Thanks. Anything I know about it I learned here.

Gina,

Our 457 plan is also not handled by the Third Party Administrator. Its a seperate entity onto itself. You may need to contact them directly or talk to your employer. 

You said:

I am interested in low fees but with a good return rate. If I need to compromise on fees in order to get a better return rate I can do that as well. Whatever you think is the best way to go so that when I retire I have made a smart choice! 

 

The one thing you can control is costs-fees. A higher cost does not equate to higher return or better product. Never did and never will. Aspire would be easy to sign up for if you want to self direct into a  Vanguard target fund. I recommend this for easy investment in a decent choice. Index funds beat most other funds overtime and Vanguard target funds are made up of index funds

Tony

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This is what I’m understanding so far: Aspire would be the easiest to sign up with as opposed to Lincoln or Security Benefits NEA Direct? And all three offer Vanguard Target Funds? 

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6 hours ago, Gina NY said:

This is what I’m understanding so far: Aspire would be the easiest to sign up with as opposed to Lincoln or Security Benefits NEA Direct? And all three offer Vanguard Target Funds? 

I think Aspire is the easiest to sign up with, and it has Vanguard Target Date funds. It's fees are 0.15% added to a funds expense ratio, and $40 per year. SB NEA Direct Invest has TRPrice TD funds with ERs around 1.0%--not a good option if you want to use TD funds. The Lincoln Investment DIY plan is a long s--it may not be available in your district. If it is, I think Vanguard TD funds are available. Their annual fee is either $60 or $35 (both have been reported).

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Is it important for the company I choose to offer all of the options they have listed at the top of the provider list? For example (F) fixed, (FI) fixed index, (VA) variable annuity, (RIA) investment Advisory Service, and (MF) mutual funds? 

 

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Gina

Gina, great choices in Direct Invest . You could do 50% Total Market Index, 25% Total International Index, and 25% in the bond fund but you will have to manage it yourself and change allocations yourself.Are you comfortable with that?

I would go Aspire Direct Invest (no advisor) and chose this fund if you want all the work done for you.

https://personal.vanguard.com/us/funds/snaps?FundId=0695&FundIntExt=INT&funds_disable_redirect=true

You will notice from the graph that in ten years time your $10,000 would just about double and you won't have to lift a finger.

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7 minutes ago, Gina NY said:

Is it important for the company I choose to offer all of the options they have listed at the top of the provider list? For example (F) fixed, (FI) fixed index, (VA) variable annuity, (RIA) investment Advisory Service, and (MF) mutual funds? 

 

no you don't need all that necessarily

 

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37 minutes ago, Gina NY said:

Is it important for the company I choose to offer all of the options they have listed at the top of the provider list? For example (F) fixed, (FI) fixed index, (VA) variable annuity, (RIA) investment Advisory Service, and (MF) mutual funds? 

 

The only providers that we recommend are 403b plans that are (MF) mutual fund based. F, FI and VA are varieties of annuity based 403b plans, are very expensive and produce very low returns. As you see, many providers provide both MF and annuity based plans, but usually the MF plans of insurance companies are very expensive.

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I’m definitely not comfortable managing the account myself. I will check Aspire since it does everything for you. That’s what I need! 

Also, if I was to, let’s say, have $10,000 in my current account what would the return possibly be in ten years? I know you said I can double that money. How much could I make with American Funds? (Roundabout figure)

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